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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
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Contract in the correct Account; the late making or taking of any delivery; any breach of Rule 202axix participation in default management simulations, new technology testing and other exercises; any breach of Rule 503g the submission of end-of-day prices relating to Sets of CDS Contracts required of Clearing Members to aid in the establishment of Mark-to-Market Prices; any breach of a position limit under Part 6 of the Rules; any breach of any provision of the Rules or Procedures considered by the Clearing House to be of a factual nature where the Clearing House holds sufficient evidence of such facts; any breach of any provision of the Rules or Procedures considered by the Clearing House to be minor in nature; or any breach of the Rules or Procedures which the Clearing House considered would be appropriately addressed by the Summary Disciplinary Process.
Sanctions pursuant to proposed Rule 1008 would be limited to the following:
Issuance of a private warning or reprimand naming the Clearing Member or a Clearing Member Customer, client or Representative; a fine of up to 50,000; or any combination of the foregoing.
Proposed Rule 1008 would also specify the process of imposing any sanction, including the notice process by the Clearing House, the opportunity for a Clearing Member to appeal, the grounds for appeal and the actions the appeal panel may take i.e., to affirm, vary or revoke a sanction. It would also allow the Clearing House to provide further guidance by way of Circular in relation to the operation of the Summary Disciplinary Process.
dd. Other Proposed Drafting Enhancements and Improvements A number of other drafting enhancements, clarifications and improvements are proposed.
This includes a number of amendments to the definitions in Rule 101. A new definition of Acceptance Time would be added. The definition is consistent with the definitions currently in the CDS Procedures and FX
Procedures, and would be added to the Rules for clarity given that the term is used in the Rules, e.g., Rule 1204 and also in paragraph 10 of Standard Terms annexes.
In the definition of Applicable Law, a reference to the FSMA would be added. This important piece of UK
legislation for CCPs, such as ICE Clear Europe, was unintentionally omitted from the Applicable Law definition.
In the Clearing Organisation definition, a reference to securities clearing agency would be added, to
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ensure that the defined term includes securities clearing agencies regulated by the SEC.
In the Defaulter definition, amendments would clarify that the defined term refers to a person in respect of whom an Event of Default has occurred, rather than a person in respect of whom a Default Notice has been issued.
A new definition of FINRA
referencing the U.S. Financial Industry Regulatory Authority, the self-regulatory body of several US clearing members, would be added. The term is currently used but in the definition of Regulatory Authority, but is not defined.
The definition of Original Margin would be amended to clarify that buyers security, sellers security and delivery margin would all be included.
The Regulatory Authority definition would also be updated to include reference to National Futures Association, a self-regulatory body in the U.S. which supervises several clearing members.
The definition of Rule Change would be amended expressly to include changes to the Contract Terms. Rule 109bvii and viii and 109k already assume that the definition Rule Change covers changes to Contract Terms, but the definition itself is inconsistently narrower. The cross reference to Rule 109 would be clarified to reflect that it is not the sole provision governing the process for Rule Changes.
In the definition of Segregated Customer, typographical corrections would be made.
The definitions of Transferee and Transferor would be revised to clarify that the subject of a transfer or delivery is a Deliverable as defined in the Rules.
Rule 201av is proposed to be amended to correct an erroneous use of the singular Contract when the plural Contracts should be used.
Rules 304aiiA, 304aiiB and 1901e would be amended to correctly reference the term Nominated Bank Account.
A clarification is proposed to Rule 401g to reflect that under existing practice and as stated and assumed elsewhere in the Rules e.g., Rule 906, Clearing Procedures, Clearing Members can have multiple Proprietary Position Accounts.
Rule 406a would be amended to remove an erroneous reference to the legacy term Clearing Processing System and replace it with the correct defined term ICE System.
Rule 904b would be amended to correct the use of an incorrect term Market-to-Market Value to the correct
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definition Mark-to-Market Price. A
change would similarly be made at Rule 905g to delete a reference to Marketto-Market Value as well as the unused term Reference Price.
An amendment is proposed to Rule 905bix to reflect that there may be multiple Defaulters rather than just one.
Amendments to Rule 908i would correct typographical errors and an incorrect cross-reference.
Rule 908ii would be amended to reflect that the applicable modifications would be set out in the Default Auction Procedures as opposed to a Circular.
In the definition of MTM/VM in Rule 913axxxi, amendments would be proposed to reflect that MTM/VM is transferred to rather than held as a deposit by the Clearing House.
The definition of Product Termination Amount in Rule 913axxxviii is proposed to be deleted as this term is already defined in Rule 916.
A minor amendment is proposed to Rule 913alviii to clarify for the avoidance of doubt that amounts payable in respect of transfers are included in the definition of Transfer Cost.
A correction would be made to Rule 915e to refer to correctly reference all categories of mark-to-market or variation margin for all product categories.
Clarifications would be made to Rule 916i to be clear that Guaranty Fund and Assessment contributions due pursuant to Rule 916i are subject to the provisions of Rule 917 including the limitations thereon during a Cooling-off Period.
Rule 918d would be clarified to refer to any Event of Default rather than multiple Events of Default.
It is proposed to incorporate references to Rules 916 and 918 into Rule 1102g to reflect that these Rules are also applicable in certain cases to determining the return of Guaranty Fund contributions.
Rule 1901dvi would be deleted because the Council Directive referenced by this provision has been repealed. Subsequent provisions would be renumbered and cross-references in other provisions updated.
A typographical error in the title of Part 23 would be corrected.
Other typographical and similar corrections would be made in various provisions of the Rules, including 102q, 202axxi, 203axx and 504cvi.
Part 3b of the F&O Standard Terms would be amended to more clearly state that Customer-CM F&O Transactions would arise in accordance with Part 4
of the Rules. This change would align
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